By KENNEDY MUPESENI –
THE extension of a tax amnesty on interest and penalties by the Government after it elapsed on March 31, 2023 is a major ‘breather’ for the businesses struggling with cash flow.
Finance and National Planning Minister Situmbeko Musokotwane last week announced the extension of the tax amnesty by three months following the overwhelming response from taxpayers.
Dr Musokotwane, has extended amnesty on tax penalties and interest obligations granted to taxpayers in the 2023 budget to June 30, 2023.
During the amnesty, ZRA received 11,700 applications resulting in the collection of K2.6 billion.
The Government through ZRA provided a tax amnesty to give relief which run from October 1 last year to March 31 this year.
The amnesty applied to the interest and penalty direct and indirect tax for the period ending September 30, last year.
The measure was devised to mitigate the impacts of COVID-19 pandemic which disrupted the operations of the economy.
Dr Musokotwane says the Zambia Revenue Authority (ZRA) received overwhelming response from eligible taxpayers, many of whom have continued to submit tax returns to qualify for the amnesty.
“The Government has extended the tax amnesty on tax penalties and interest obligations granted to taxpayers, which was introduced as part of the 2023 budget measures,” he says.
With this extension it is expected that no eligible taxpayer will be left behind as the Government anticipates collection of more revenue from the initiative.
He says the positive response from taxpayers is a manifestation of the effectiveness of some of the tax-related measures which the Government introduced as part of the 2023 budget.
Despite the slow start in the early days of the amnesty, it seems Zambians have appreciated the benefit of the measure to their businesses and are applying in large numbers.
Recently ,Kitwe District Chamber of Commerce and Industry (KDCCI) president Emmanuel Mbambiko said the Government should consider extending the
Tax Amnesty Programme (TAP) on penalties and interest to December this year.
“We asking Finance Minister Situmbeko Musokotwane to extend the amnesty, the business on the Copperbelt has been experiencing challenges due to the low production levels at Mopani Copper Mine (MCM) and Konkola Copper Mine (KCM) among others,” Mr Mbambiko states.
He states that ZRA system failure and poor internet connectivity have been major hiccups during the amnesty period.
“ZRA system has been challenging, logging in the system has been a game of chance and we have brought this to the attention of ZRA,” Mr Mbambiko says.
He says power internet connectivity has also been a drawback as the internet lines keep dropping thereby making it difficult to file tax returns to qualify for an amnesty.
Therefore, a horde of stakeholders on the Copperbelt and beyond have welcomed the extension of the tax amnesty by three months.
They have said that it will allow business to have more time to resolve long outstanding reconciliations.
Ndola District Chamber of Commerce and Industry (NDCCI) president Joseph Malisawa says the extension of amnesty will allow time for resolving long outstanding reconciliations with data cleaning units which prevent payers from successfully applying for the amnesty.
Mr Malisawa states that the amnesty will allow more time for businesses to raise money to settle the obligations.
“We wrote a letter to ZRA two weeks ago requesting extension. We listed reasons. We are glad they responded positively,” he says.
The chamber wants the ZRA tax amnesty team to work closely with the data cleaning team to reconcile tax payer’s accounts within the extension period.
As for the Zambia Association of Manufacturers (ZAM), the extension will allow more manufacturing companies to raise money to settle their obligations.
ZAM president Ashu Sagar says some manufacturers failed to meet the deadline due to various challenges such as lack of sound cash flow.
Hence, the extension will in no doubt give companies more recovery time after COVID-19 pandemic.
It is expected that enterprises especially in the Small and Medium Enterprise (SMEs) category will take advantage of the extension to clear their books with the tax collector.
Having a clear tax records is good for the business and the country at large hence the need to use the extension to be at peace with the ZRA.